Progyny, a company that manages fertility benefits for employees at large firms, closed its first day of trading as a public company Friday about 23% above its set price.
The first fertility benefits management company to ever go public, Manhattan-based Progyny announced Thursday the pricing of its initial public offering of 10 million shares of its common stock at a price of $13 per share, below the range of $14 to $16 per share per share stated in its S-1 filing with the Securities and Exchange Commission (SEC).
The company offered 6.7 million shares, and selling stockholders offered 3.3 million shares. Additionally, certain selling stockholders have granted the underwriters a 30-day option to purchase up to an additional 1.5 million shares at the IPO price less the underwriting discount. The offering is expected to close Oct. 29.
At the offer price, Progyny commands a fully diluted market value of $1.3 billion.
Progyny closed at $15.94, which was 22.6% higher than its initial price.
The company, which trades under the symbol "PGNY" on the Nasdaq, filed its preliminary prospectus with the SEC Sept. 27 for its IPO.
Progyny launched its fertility benefits solution in 2016 with its first five employer clients and has grown its client base to over 80 companies including Google, Facebook and Microsoft. The company currently provides coverage to 1.4 million employees, the company said in its S-1 filing.
Peter Anevski, president, chief financial officer and chief operating officer of Progyny, said company leaders were confident in the timing to go public.
"We are in a good position from a growth standpoint and we have a proven model with the ability to achieve profitability. The company is early in the first inning of its growth," Anevski told FierceHealthcare. "We have 80 clients now and we believe we have an addressable market of 8,000 potential self-insured employer clients in the United States."
Progyny generated $103.4 million in revenue in the first half of 2019 and net income of $4.04 million. That compares to $48.4 million in revenue in the first six months of 2018 and a net loss of $2.4 million, the company said. Full-year 2017 revenue was $48.6 million, and that grew to $105.4 million in 2018, representing year-over-year growth of 117%.
Progyny joins a growing list of health and wellness and healthcare technology companies to go public this year including Livongo, Health Catalyst, Change Healthcare and Phreesia.
Chronic disease management company Livongo Health and data and analytics company Health Catalyst both had strong public debuts in July. Phreesia, which developed a patient intake management platform, closed its first day of trading as a public company July 19 about 40% above its set price.
Primary care organization One Medical has hired banks including JPMorgan and Morgan Stanley in preparation for an IPO.
Societal trends such as women and couples waiting longer to have children as well as growing awareness of fertility issues are driving demand for Progyny's services and solutions, said Anevski, who was the CFO at WedMD before joining the fertility benefits company.
Progyny executives say access to fertility treatment has previously been limited by poor insurance coverage in the U.S. Major insurance carriers have traditionally offered a "one-size-fits-all" solution for patients, Anevski said. "That's not the case for fertility treatment and it needs to be customized for each member experience."
The company aims to address that gap by offering a "purpose-built, data-driven and disruptive platform" that delivers "superior clinical outcomes in a cost-efficient manner," the company said in its S-1 filing.
Progyny offers treatment bundles that cover diagnostic testing and connect members with a patient care advocate. Progyny also offers members access to a network of fertility specialists and an integrated pharmacy benefits solution, Progyny Rx.
The company said its unique approach and range of benefits result in above-average fertility outcomes for its members, with Progyny members using in-network clinics reporting an 89% rate of single embryo transfer compared with the 53.1% rate for all patients at Progyny network clinics and the 49.5% national average, according to SEC documents.
The market for fertility treatments in the U.S. was approximately $6.7 billion in 2017, Progyny said in its S-1 filing.
The company is looking to continue to grow and scale to tackle the nearly 8,000 companies as part of its addressable market and may look to expand benefits beyond fertility, Anevski said.
The company has raised nearly $100 million in venture capital with investors including Kleiner Perkins and M Ventures, Merck's corporate venture arm, according to Crunchbase.